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Raising Investment for Startups with Abbas Yousafzai & Yasser Bashir

Mr. Nabeel Qadeer has always enabled youngsters to learn from the best in the industry. He brought his Entrepreneurship Masterclass Batch 1 to a fantastic close with two of the most credible angel investors in the startup ecosystem of Pakistan โ€“ Mr. Abbas Yousafzai (Co-founder & Head of Data Engineering, Conrad Labs) & Mr. Yasser Bashir (Founder & CEO, Arbisoft) in an exclusive session on raising investments powered by DirAction. The young entrepreneurs took away some great pieces of advice from the interactive discussion. Below are the key takeaways for all startup founders who are looking forward to raising investment: ๐—ช๐—ต๐—ฎ๐˜'๐˜€ ๐˜๐—ต๐—ฒ ๐—ฐ๐—ฟ๐—ถ๐˜๐—ฒ๐—ฟ๐—ถ๐—ฎ ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐—ฎ๐—ฟ๐—ฒ ๐—น๐—ผ๐—ผ๐—ธ๐—ถ๐—ป๐—ด ๐—ฎ๐˜ ๐—ฏ๐—ฒ๐—ณ๐—ผ๐—ฟ๐—ฒ ๐—ฝ๐˜‚๐˜๐˜๐—ถ๐—ป๐—ด ๐˜๐—ต๐—ฒ๐—ถ๐—ฟ ๐—บ๐—ผ๐—ป๐—ฒ๐˜† ๐—ถ๐—ป๐˜๐—ผ ๐—ฎ ๐˜€๐˜๐—ฎ๐—ฟ๐˜๐˜‚๐—ฝ? The founder and his why. More than the viability of the product & the business model, investors invest in the founder himself. The underlying factor that they look at is his/her โ€œwhyโ€; what is the founder driven by? Does he himself believe in the product he has made? Does he have the conviction and resilience to bounce back up when failure hits or market dynamics change? Second, does the entrepreneur really want to solve a problem? Does he have the โ€˜selflessnessโ€™ and โ€˜empathyโ€™ to solve it? Is he just about raising money? Another thing that investors look for in a founder is his domain knowledge. Does he know deeply about the industry he wants to operate in or is it just a thought-less decision? Has he validated, verified the problem he is trying to solve? Does he know the numbers? ๐—ช๐—ต๐—ฎ๐˜โ€™๐˜€ ๐˜๐—ต๐—ฒ ๐—ฑ๐—ถ๐—ณ๐—ณ๐—ฒ๐—ฟ๐—ฒ๐—ป๐—ฐ๐—ฒ ๐—ฏ๐—ฒ๐˜๐˜„๐—ฒ๐—ฒ๐—ป ๐—ฎ ๐—ฉ๐—– (๐—ฉ๐—ฒ๐—ป๐˜๐˜‚๐—ฟ๐—ฒ ๐—–๐—ฎ๐—ฝ๐—ถ๐˜๐—ฎ๐—น๐—ถ๐˜€๐˜) & ๐—ฎ๐—ป ๐—”๐—ป๐—ด๐—ฒ๐—น ๐—œ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ? An angel investor invests his own money into a startup as opposed to a venture capitalist who himself is a โ€˜Managing Partnerโ€™ and raises funds from people who have money and are willing to invest, called โ€˜Limited Partnersโ€™, at a commitment that he will return the money back after a certain promised period of time along with interest on profits. Once the โ€˜fundโ€™ is collected it is mutually decided between a VC and the fundโ€™s LPs about its usage such as how many startups will they be investing in and in which verticals. Another difference is that a VC is very actively involved in startupโ€™s decision making and asks for financial statements on a weekly and quarterly basis, unlike an angel investor who doesnโ€™t have a lot of margin to absorb the losses but at the same time give more freedom to the founders to make decisions. The propensity of pulling out the finances back when the company is going through losses is very high in the case of a VC as opposed to an angel investor. ๐—›๐—ผ๐˜„ ๐—ฑ๐—ผ๐—ฒ๐˜€ ๐—ฎ ๐—ฉ๐—– ๐—บ๐—ฎ๐—ธ๐—ฒ ๐—บ๐—ผ๐—ป๐—ฒ๐˜†? Venture Capital is like any other investment opportunity. A venture capitalist makes money in the form of โ€˜management feeโ€™ for managing the fund and by charging the startup interest on the profits it makes, called โ€˜carried interestโ€™. ๐——๐—ผ ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐—ต๐—ฎ๐˜ƒ๐—ฒ ๐—ฎ๐—ป๐˜† ๐—ฝ๐—ฟ๐—ฒ๐—ณ๐—ฒ๐—ฟ๐—ฒ๐—ป๐—ฐ๐—ฒ ๐˜๐—ผ๐˜„๐—ฎ๐—ฟ๐—ฑ๐˜€ ๐—ฎ ๐—ฝ๐—ฎ๐—ฟ๐˜๐—ถ๐—ฐ๐˜‚๐—น๐—ฎ๐—ฟ ๐˜ƒ๐—ฒ๐—ฟ๐˜๐—ถ๐—ฐ๐—ฎ๐—น ๐˜„๐—ต๐—ฒ๐—ป ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ถ๐—ป๐—ด ๐—ถ๐—ป ๐—ฎ ๐˜€๐˜๐—ฎ๐—ฟ๐˜๐˜‚๐—ฝ? An investor preferably invests in a startup where he or she can add value, and also at the same time learn from it. If the startup vertical is the same as his, then for an investor every failure is a good learning & at the same time he will also be able to help effectively in the solution. ๐—ช๐—ต๐—ฎ๐˜ ๐—ฑ๐—ผ๐—ฒ๐˜€ ๐—ถ๐˜ ๐˜๐—ฎ๐—ธ๐—ฒ ๐˜๐—ผ ๐—ฏ๐—ฒ ๐—ฎ๐—ป ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ? To be an investor you should be in a high risk mindset. You should be ready that, for example, if you invest in 15 startups only one will grow and pay for the other 14 that will fail. If you donโ€™t have the capacity to absorb this, then never become an investor. You should be ready for 6 to 8 out of 10 startups that you invest in, to fail. Watch full session at the link below: https://youtu.be/e_WissOd_OU

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